If the digits $7,7,3,2$, and 1 are randomly arranged from left to right, what is the probability both of the 7 digits are to the left of the 1 digit?
The answer is $1/3$ because $1 7 7$, $7 7 1$, $7 1 7$.
I thought about re-arranging the two sevens as one digit "77"1 then the three and two have two positions, and we re-arrange the "77" and 1 glued together using $3 \choose 1$ and divide by $5!$
You are correct that the answer is $1/3$. Only the relative positions of the $1$ and the two $7$s matter.
If you insist on considering all five digits, there are $\binom{5}{2}$ ways to place the two $7$s and $3!$ ways to arrange the remaining three distinct digits in the remaining three positions. Therefore, there are $$\binom{5}{2}3!$$ elements in the sample space, not $5!$.
For the favorable cases, there are five ways to place the $2$ and four ways to place the $3$. Once those numbers are placed, there is only one way to arrange the $7$s and $1$ in the remaining three places so that both $7$s appear before the $1$. Hence, there are $$5 \cdot 4$$ favorable cases.
Consequently, the probability that both $7$s appear before the $1$ is $$\frac{5 \cdot 4}{\dbinom{5}{2}3!} = \frac{1}{3}$$ as you found by considering the relative positions of the two $7$s and the $1$s.